Abstract

The time limit for bringing an action for annulment of the GMS decision as well as the theoretical and practical aspects are of particular relevance since the annulment of the decisions of the General Meeting of Shareholders is the change/modification of the company’s will, expressed by the shareholders’ decision, and the appeal against it can be lodged only by this way, it cannot be incidental in other applications.

Keyword: claim of annulment, the term for the introduction of the claim of annulment.

1       Introduction

The first part of Article 132 paragraph 2 of the Law on Commercial Companies stipulates that “Decisions of the general meeting that are contrary to the law or the articles of association may be appealed against within 15 days from the date of publication in the Official Gazette of Romania, Part IV”.

It is important to address the issue of the nature of the 15-day deadline, namely whether it is a limitation period or a time-limit. Practically, the limitation period is subject to suspension or discontinuation, as well as to the relief from effects of expiry, as opposed to that of the time-limit[1]. The doctrine and case-law have unanimously established the nature of the deadline as being a limitation period[2].

What is extremely beneficial is that the deadline is one related to the procedural law, so it is calculated on days off.

In practice, it is relevant the fact that a decision of a general meeting of shareholders cannot be challenged incidentally, that is by way of objection within other proceedings. In this respect, Bucharest Court of Appeal stated in judgment no. 791 of May 20, 2009[3] that in an action seeking the withdrawal from the company of an associate for misunderstandings with the other associates, although the applicant disputes that she had been summoned to the general meetings of that company, she could not prove it by final judgements given following actions for annulment of those decisions of general meetings. In other cases, the High Court of Cassation and Justice, referring to a judgment rendered by Timişoara Court of Appeal, stated that the objection to the invalidity of the decision of the general meeting of shareholders can be analysed only within the procedural framework established by the mandatory provisions stipulated in Article 132 of Law no. 31/1990[4].

In that case, this objection was raised before Bucharest Court of Appeal in an action for annulment of an arbitration award. Thus, in order to obtain the sanction of the invalidity of the GMS decision under Article 132 of the Law on Commercial Companies, the procedure established by this article must be followed. Violations of the rules regarding the adoption of a GMS decision do not lead only to a sanction or to the possible annulment of this decision. In the case decided by Bucharest Court of Appeal, the applicant was not seeking to invalidate the decisions of the GMS to which she claimed she had not been summoned but asserted that right in support of her claim that there were serious misunderstandings between the associates and that she was excluded from participation to the social life, in order to obtain the right to withdraw from company. Thus, she did not claim that those decisions were invalid legal acts, but rather invoked them (notably, she invoked that she had not been summoned to the GMS meetings) in order to obtain another legal effect, namely withdrawal from the company (a limited liability company).

I believe that it should be reiterated the idea that, within the procedural framework, it was not legal acts (GMS decisions) that were appealed against, but facts were stated that, according to the provisions of the Code of Civil Procedure, could be proved by any means of evidence.

It is worth noting that reaching the 15-day deadline does not extinguish, “as in the case of time-barring, the subjective right to compensation, if a damage was created by the GMS decision”[5]. The issue may, however, revolutionize the judicial practice since, at that date, the effect of the 15-day deadline was to block the legality control of the GMS decisions after its expiration, even incidentally. Compensations are designed as a complementary sanction for the annulment; thus, in its absence, no autonomous claims for damages for allegedly unlawful decisions were made[6].

I mention that the compensation is not complementary or subsidiary to the annulment, which determines the fact that, for an unlawful decision, an action for damages can be filed after the expiry of the 15-day deadline stipulated by Article 132 paragraph 2. Entailing the liability determines proving the unlawful deed causing damage, that is, proving the fact that the GMS decision is contrary to the statutory or legal provisions. Finding that a decision violates the law is not one and the same as annulling the decision. The principle of legal certainty prevails with regard to the time limit in which the annulment of a decision can be demanded but, in the present case, the ex iniuria isu non oritur principle precludes it.

If legal certainty is not impaired, there is no reason to prohibit the exercise of the right to seek a declaration of unlawfulness of the decision and to award damages after the expiry of the 15-day deadline, but within the three-year general limitation period.

In administrative law, for example, a similar reasoning would be difficult to conceive, because Law no. 554/2004 of the litigation requires the presence of an application for annulment of the administrative act as a prerequisite for any claims for compensation for damages. Only the administrative litigation court has the right to find the illegality of an administrative act, a sine qua non condition for granting the application for compensation for damages. Regulating the judicial proceedings of pleas of illegality has the same purpose. This reasoning does not exist in the case of unlawful decisions of GMS which, being a matter of common law, can be challenged by any civil court.

With regard to the question of whether an action for annulment could be brought only after the decision has been published in the Official Gazette or it could be filed before that date (between the date of adoption of the decision and the date of its publication), several points of view were expressed in practice and doctrine. Thus, shareholders may have a justified and current legitimate interest in bringing an action for annulment between the above-mentioned moments, but the requirement to publish it in the Official Gazette is a measure of protection for the shareholders and, as such, it cannot be enforced against them[7].

In fact, the case-law practice has undergone a sudden change and recent decisions reveal with no doubt that the shareholders’ right to bring an action for annulment before the decision is published in the Official Gazette is accepted. The period for bringing an action for annulment is therefore the period elapsing between the adoption of the decision and its publication, plus the 15 days following publication.[8] The limitation period starts to run from the date of publication in the Official Gazette and represents the period during which a right may be exercised[9]. As such, the moment when the limitation period begins to run is the moment when the right to action was born and can be exercised. However, the expiration of this deadline depends on an event that is, in principle, certain to occur, unless the decision is no longer published (publication in the Official Gazette), but it is not known for certain when it will occur.

It is preferable to accept that there is always the obligation to publish the GMS decision in the Official Gazette without derogations from the rule, in order to be able to mark in time when the 15-day deadline begins to run until the expiry of the limitation period.

The High Court of Cassation and Justice, by judgment no. 311 of January 25, 2011[10], stated that an application for interference in its own interest is incompatible with the procedural framework established by an action based on the provisions of Article 132 of the Law on Commercial Companies. The reasoning is not related to the limitation period but is that the action is directed against the company, the interest of the action concerns the social will and it is not possible to conceive and accept other particular interests that could be defended by an intervention in its own interest.

The action for declaration of the absolute invalidity is not subject to a limitation period, and, practically, it can be brought at any time.

A long period elapsed from a decision and until an action for declaration of absolute invalidity is brought has led the court practice to impose a de facto form of limitation. Thus, Constanța Court of Appeal[11] granted protection to the principle of the stability of legal acts by rejecting an action for declaration of absolute invalidity of a GMS decision from 1996 as devoid of purpose, an action brought in 2006. The reasons given by the court were that the decision “has produced effects that can no longer be eliminated”, consequently the possible granting of the action could no longer lead to any practical use to the applicant.

2       Conclusion

Regardless of the form of relative or absolute invalidity, the time limit for bringing an action for annulment of the GMS decision is extremely important because the exercise of this type of action leads to an interference in the social life of a company, disturbing it or not. If the decisions taken within the GMS remain valid or not depends on this time limit, provided they are subject to the legality control exercised by the courts.

REFERENCES

• Beleiu, Gh.; Nicolae M; Trușcă P. (2007). Romania Civil Law. Introduction on the Study of Civil Law. Subjects of the Civil Law. Universul Juridic.
• Bojin, L. (2012). The Claim of Annulment of the GMA’S of the Shareholders. Ed. Universul Juridic.
• Schiau, I.; Prescure, T. (1997). Company Law No.31/1990. Analizes and Coments on Articles. Ed. Hamangiu.
• Duțescu, C. (2006). The Shareholders Right. Ed. Lumina Lex.
• Șcheaua, M. (2000). Commercial Law No.31/1990. Comments and Ammendment. Ed. All Beck.
• Catană, R. (2007). Commercial Law. Actual Problems Concerning the Shareholders Companies. The shareholders democracy. Ed. Sfera Juridica.

[1] Beleiu, G. Nicolae, M. Trușcă P. (2007). Romania Civil law. Introduction on the Study of Civil Law. Subjects of the civil law.  Ed.Universul Juridic, pag. 242.

[2] Scheaua, M. (2000). Commercial Law No.31/1990, Comments and Ammendment. Ed.All Beck, pag. 294; R. Catana, Commercial law .Actual problems concerning the shareholders companies. The shareholders democracy, Ed.Sfera Juridica, Cluj Napoca, 2007 pag. 98, I. Schiau, T. Prescure, Company law no.31/1990.Analizes and coments  on articles, Ed.Hamangiu, Bucharest, 1997, pag. 393, C. Duțescu, The shareholders rights , Ed.Lumina Lex Bucharest, 2006, p. 253.

[3] published in Commercial Law Magazine no. 11/2009, p.141.

[4] High Court of Cassation and Justice Judgment no.153 of January 18. (2011). Published on the website www.scj.ro.

[5] Duțescu, C. (2006). The Shareholders Right. Ed.Lumina Lex, p. 253.

[6] Bojin, L. (2012). The Claim of Annulment of the GMA’S of the Shaholders. Ed. Universul Juridic,  pag. 207.

[7] Schiau, I., T. Prescure, supra, p.394.

[8] Duțescu, C. supra, p. 254.

[9] Articles 2501 and 2517 of the New Civil Code.

[10] Published on the website www.scj.ro.

[11] Judgment No. 141 of November 9, 2009, published in Jurindex